Bingham Greenebaum Doll, LLP v. Lawrence
567 S.W.3d 127
| Mo. Ct. App. | 2018Background
- Meredith Lawrence hired Bingham Greenebaum Doll (Bingham) to defend him in federal tax-evasion proceedings and later executed a promissory note (up to $650,000) in June 2012 to secure unpaid legal fees, maturing December 31, 2013.
- Lawrence sued Bingham (Aug 2013) for legal malpractice, seeking damages and refund of fees; that complaint necessarily implicated the validity/enforceability of the promissory note.
- Bingham answered and filed a counterclaim to enforce the note; Lawrence did not respond to the counterclaim, and Bingham moved for default judgment.
- After the note matured, the trial court entered default judgment for Bingham (Sept 2014); Lawrence later moved under CR 60.02 to set aside the default judgment as void, arguing the counterclaim was unripe when filed.
- A new judge granted CR 60.02 relief, concluding the counterclaim was not ripe at filing and therefore the court lacked subject-matter jurisdiction; the Court of Appeals affirmed.
- The Kentucky Supreme Court reversed: because Lawrence’s complaint put the enforceability of the note in issue and Bingham’s counterclaim was compulsory, the counterclaim was justiciable despite the note’s future maturity; the Court remanded with directions to reinstate the default judgment.
Issues
| Issue | Plaintiff's Argument (Lawrence) | Defendant's Argument (Bingham) | Held |
|---|---|---|---|
| Whether a counterclaim to enforce a promissory note due in the future was ripe/justiciable when filed prior to maturity | Counterclaim was unripe because the note had not matured, so no cause of action existed and the court lacked subject-matter jurisdiction | Counterclaim was justiciable because Lawrence’s malpractice complaint placed the note’s enforceability at issue | Court held the counterclaim was justiciable despite immaturity because Lawrence’s complaint necessarily called the note’s validity into play; default judgment must be reinstated |
| Whether CR 13.01 (compulsory counterclaim) or plaintiff’s pleading can render an otherwise premature note-enforcement claim ripe | The compulsory-counterclaim rule cannot overcome ripeness; a claim must exist at time of pleading to be compulsory | The counterclaim was compulsory to Lawrence’s malpractice claim and thus properly adjudicated as part of the same case | Court treated the counterclaim as compulsory and justiciable because pleadings (taken at face value) made it the kind of case the court could decide |
Key Cases Cited
- Daugherty v. Telek, 366 S.W.3d 463 (Ky. 2012) (subject-matter jurisdiction is based on the "kind of case" in the pleadings)
- Huffman v. Martin, 10 S.W.2d 636 (Ky. 1928) (action to enforce a promissory note generally accrues only at maturity)
- Gould v. Bank of Independence, 94 S.W.2d 991 (Ky. 1936) (when maturity is fixed, payee's right of action accrues at maturity)
- Head v. Oglesby, 194 S.W. 793 (Ky. 1917) (maker may seek cancellation of a note before or after its due date)
- Nordike v. Nordike, 231 S.W.3d 733 (Ky. 2007) (ripeness is required for a claim to be justiciable)
- Stephens v. Denison, 150 S.W.3d 80 (Ky. App. 2004) (exoneration rule bars legal-malpractice actions absent postconviction relief)